TIDMLTHM
RNS Number : 9021U
Latham(James) PLC
28 November 2019
James Latham plc
("James Latham" or the "Company")
HALF YEARLY RESULTS FOR THE PERIODED 30 SEPTEMBER 2019
Chairman's statement
Unaudited results for the six months trading to 30 September
2019
Revenue for the six months ended 30 September 2019 was
GBP125.6m, up 6.3% on GBP118.2m for the same period last year. This
turnover increase is down to our long term strategic changes in
product mix, as overall volumes have been static. The panel product
business has seen an increase in delivered volumes through our
warehouses, but a reduction in our direct volumes. Our timber
business has also seen an increase in delivered volumes especially
on added value products. Prices have decreased on most of our
commodity panel products throughout this six month period although
timber prices have remained stable.
Gross margin for the six month period ended 30 September 2019
was 17.4% compared with 17.1% in the comparative six months. This
figure includes warehouse costs which are higher due to the
increased volumes through our warehouses, and also part of our
strategy to increase the working hours in order to better meet our
customer needs. Three of our depots are now working 24 hours/5 days
a week. The increased delivered volumes have also resulted in an
increase in distribution costs. Administrative expenses though are
lower than last year, with a reduction in the bad debt charge.
Operating profit was GBP8.5m, up 9.6% on last year's profit of
GBP7.7m. Profit before tax was GBP8.3m compared with GBP8.7m in the
comparative six months which included a profit of GBP1.1m on the
sale of our old Yate site. Earnings per ordinary share, excluding
the profit on the sale of Yate were 33.8p (2018: 31.5p) an increase
of 7.3%.
As at 30 September 2019 net assets are GBP97.6m (2018:
GBP98.6m). We have adopted IFRS 16 on leasing in these results,
which has had an insignificant effect on profit before tax and
these changes are explained in note 6 to this statement. Stock
volume levels have remained stable throughout the six months. Trade
Receivables have continued to show good debtor days figures. Cash
and cash equivalents of GBP16.5m (2018: GBP12.9m) remain strong and
we continue to take advantage of additional early settlement
discount opportunities with our suppliers.
The calculation of the pension deficit remains very sensitive to
changes in assumptions, and the pension deficit under IAS19 is
calculated as increasing from GBP8.7m at 31 March 2019 to GBP14.6m
at 30 September 2019. This is largely due to a reduction in the
discount rate.
Interim dividend
The Board has declared an increased interim dividend of 5.5p per
Ordinary Share (2018: 5.0p), which is covered 6.1 times (2018: 7.4
times). The dividend is payable on 24 January 2020 to ordinary
shareholders on the Company's Register at close of business on 3
January 2020. The ex-dividend date will be 2 January 2020.
Current and future trading
The second half of 2019/20 has started well with margins
slightly ahead of the previous period. We are seeing increased
sales at Abbey Woods, the Irish timber distributor purchased in
February 2019, and also an improvement in our panel product
volumes. Purchase prices of our commodity panel products remain
weak. The investment in our Gateshead facility, to improve the site
efficiency, is going well, and should be completed in June 2020.
The racking investment at Purfleet will be completed by the end of
December 2019. The majority of our customers are busy, and we
remain confident that we can continue to grow our business, but
remain mindful of the uncertainties caused by the forthcoming
General Election and a weakening global economy.
I am also very pleased to have reported this week the strategic
purchase of Dresser Mouldings for GBP1 million, which will allow us
to continue to grow our sales of added value timber.
Nick Latham
Chairman
28 November 2019
This announcement contains inside information for the purposes
of Article 7 of the Market Abuse Regulation (EU) No 596/2014.
For further information please visit www.lathams.co.uk or
contact:
James Latham plc Tel: 01442 849
100
Nick Latham, Chairman
David Dunmow, Finance Director
SP Angel Corporate Finance
LLP
Matthew Johnson / Charlie Tel: 0203 470
Bouverat (Corporate Finance) 0470
Abigail Wayne (Corporate
Broking)
JAMES LATHAM PLC
CONSOLIDATED INCOME STATEMENT
For the six months to 30 September 2019
Six months Six months Year to
to 30 Sept. to 30 Sept. 31 March
2019 unaudited 2018 unaudited 2019 audited
GBP000 GBP000 GBP000
Revenue 125,609 118,160 235,132
Cost of sales (including warehouse costs) (103,726) (97,974) (194,686)
Gross profit 21,883 20,186 40,446
Selling and distribution costs (9,703) (8,679) (18,082)
Administrative expenses (3,712) (3,782) (7,896)
Operating profit 8,468 7,725 14,468
Profit on disposal of property - 1,052 1,052
Finance income 46 32 71
Finance costs (198) (141) (256)
Profit before tax 8,316 8,668 15,335
Tax expense (1,630) (1,418) (2,913)
Profit after tax attributable to owners
of the parent company 6,686 7,250 12,422
Earnings per ordinary share (basic) 33.8p 36.9p 63.1p
Earnings per ordinary share (diluted) 33.8p 36.8p 63.0p
================================================= ================ ================ ==============
Earnings per ordinary share (basic, excluding
profit on disposal of property) 33.8p 31.5p 61.6p
Earnings per ordinary share (diluted, excluding
profit on disposal of property) 33.8p 31.5p 61.5p
================================================= ================ ================ ==============
All results relate to continuing operations.
JAMES LATHAM PLC
CONSOLIDATED STATEMENT OF COMPREHENSIVE
INCOME
For the six months to 30 September 2019
Six months Six months Year to
to 30 Sept. to 30 Sept. 31 March
2019 unaudited 2018 unaudited 2019 audited
GBP000 GBP000 GBP000
---------------------------------------------- ---------------- ---------------- --------------
Profit after tax 6,686 7,250 12,422
Other Comprehensive income
Actuarial (loss)/gains on defined benefit
pension scheme (6,767) 4,444 (1,360)
Deferred tax relating to components of other
comprehensive income 1,150 (673) 314
Foreign translation credit/(charge) 12 - (31)
---------------------------------------------- ---------------- ---------------- --------------
Other comprehensive income for the period,
net of tax (5,605) 3,771 (1,077)
---------------------------------------------- ---------------- ---------------- --------------
Total comprehensive income, attributable
to owners of the parent company 1,081 11,021 11,345
============================================== ================ ================ ==============
JAMES LATHAM PLC
CONSOLIDATED BALANCE SHEET
At 30 September 2019
As at 30 As at 30 As at 31
Sept. 2019 Sept. 2018 March 2019
unaudited unaudited audited
GBP000 GBP000 GBP000
ASSETS
Non-current assets
Goodwill 523 237 523
Intangible assets 1,905 1 1,989
Property, plant and equipment 34,581 33,979 34,159
Right-of-use-asset 4,344 - -
Deferred tax asset 2,560 582 1,577
Total non-current assets 43,913 34,799 38,248
Current assets
Inventories 42,501 41,462 42,350
Trade and other receivables 45,697 43,082 42,613
Cash and cash equivalents 16,538 12,864 15,541
Total current assets 104,736 97,408 100,504
Total assets 148,649 132,207 138,752
------------------------------------------- ------------ ------------ ------------
Current liabilities
Lease liabilities 1,143 - -
Trade and other payables 28,321 25,743 27,113
Current tax payable 86 1,272 1,193
------------------------------------------- ------------ ------------ ------------
Total current liabilities 29,550 27,015 28,306
Non-current liabilities
Interest bearing loans and borrowings 592 987 597
Lease liabilities 3,252 - -
Retirement and other benefit obligation 14,637 3,072 8,714
Other payables 180 262 413
Deferred tax liabilities 2,856 2,283 2,762
------------------------------------------- ------------ ------------ ------------
Total non-current liabilities 21,517 6,604 12,486
Total liabilities 51,067 33,619 40,792
Net assets 97,582 98,588 97,960
=========================================== ============ ============ ============
Capital and reserves
Issued capital 5,040 5,040 5,430
Share-based payment reserve 89 235 259
Own shares (891) (423) (923)
Capital reserve 398 3 3
Retained earnings 92,946 93,733 93,191
------------------------------------------- ------------ ------------ ------------
Total equity attributable to shareholders
of the parent company 97,582 98,588 97,960
=========================================== ============ ============ ============
JAMES LATHAM PLC
CONSOLIDATED CASH FLOW STATEMENT
For the six months to 30 September 2019
Six months Six months Year to
to 30 Sept to 30 Sept 31 March
2019 unaudited 2018 unaudited 2019 audited
GBP000 GBP000 GBP000
-------------------------------------------------- ---------------- ---------------- --------------
Net cash flow from operating activities
Cash generated from operations 7,468 1,972 10,267
Interest paid (3) (1) (8)
Income tax paid (2,552) (1,292) (2,651)
Net cash inflow from operating activities 4,913 679 7,608
-------------------------------------------------- ---------------- ---------------- --------------
Cash flows from investing activities
Interest received and similar income 46 32 71
Acquisition of businesses net of cash acquired - - (1,604)
Purchase of property, plant and equipment (1,512) (1,136) (2,362)
Proceeds from sale of property, plant and
equipment 119 1,718 1,743
Net cash (outflow)/inflow from investing
activities (1,347) 614 (2,152)
-------------------------------------------------- ---------------- ---------------- --------------
Cash flows before financing activities
Purchase of treasury shares (5) - (478)
Equity dividends paid (2,540) (2,379) (3,363)
Preference dividend paid (24) (39) (63)
Cash outflow from financing activities (2,569) (2,418) (3,904)
-------------------------------------------------- ---------------- ---------------- --------------
Increase/(decrease) in cash and cash equivalents
for the period 997 (1,125) 1,552
==================================================
Cash and cash equivalents at beginning of
the period 15,541 13,989 13,989
Cash and cash equivalents at end of the
period 16,538 12,864 15,541
================================================== ================ ================ ==============
JAMES LATHAM PLC
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Attributable to owners of the
parent company
Share-based
Issued payment Own Capital Retained Total
capital reserve shares reserve earnings equity
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
As at 1 April 2018 (audited) 5,040 184 (529) 3 85,091 89,789
Profit for the period - - - - 7,250 7,250
Other comprehensive income:
Actuarial gain on defined
benefit
pension scheme - - - - 4,444 4,444
Deferred tax relating to
components
of other comprehensive income - - - - (673) (673)
--------------------------------- ------------ ---------------- ----------- ----------- ------------- ----------
Total comprehensive income for
the period - - - - 11,021 11,021
Transaction with owners:
Dividends - - - - (2,379) (2,379)
Exercise of options - - - - - -
Change in investment in ESOP
shares - - 106 - - 106
Share-based payment expense - 51 - - - 51
--------------------------------- ------------ ---------------- ----------- ----------- ------------- ----------
Total transactions with owners - 51 106 - (2,379) (2,222)
--------------------------------- ------------ ---------------- ----------- ----------- ------------- ----------
Balance at 30 September 2018
(unaudited) 5,040 235 (423) 3 93,733 98,588
Profit for the period - - - - 5,172 5,172
Other comprehensive income:
Actuarial loss on defined
benefit
pension scheme - - - - (5,804) (5,804)
Deferred tax relating to
components
of other comprehensive income - - - - 987 987
Foreign translation charge - - - - (31) (31)
--------------------------------- ------------ ---------------- ----------- ----------- ------------- ----------
Total comprehensive income for
the period - - - - 324 324
Transactions with owners:
Dividends - - - - (984) (984)
Transfer of treasury shares - - (82) - 82 -
Exercise of options - (19) 54 - 19 54
Deferred tax on share options - - - - 31 31
Write down on conversions of
ESOP shares - - 14 - (14) -
Purchase of preference shares 390 - (478) - - (88)
Change in investment in ESOP
shares - - (8) - - (8)
Share-based payment expense - 43 - - - 43
--------------------------------- ------------ ---------------- ----------- ----------- ------------- ----------
Total transactions with owners - 24 (500) - (866) (952)
--------------------------------- ------------ ---------------- ----------- ----------- ------------- ----------
Balance at 31 March 2019
(audited) 5,430 259 (923) 3 93,191 97,960
Change in accounting policy
(IFRS16) - - - - 262 262
Deferred tax on IFRS 16 - - - - (45) (45)
--------------------------------- ------------ ---------------- ----------- ----------- ------------- ----------
As at 1 April 2019 (as restated) 5,430 259 (923) 3 93,408 98,177
Profit for the period - - - - 6,686 6,686
Other comprehensive income:
Actuarial gain on defined
benefit
pension scheme - - - - (6,767) (6,767)
Deferred tax relating to
components
of other comprehensive income - - - - 1,150 1,150
Foreign translation charge - - - - 12 12
Total comprehensive income for
the period - - - - 1,081 1,081
Transactions with owners:
Dividends - - - - (2,540) (2,540)
Transfer of treasury shares - - (1,668) - 1,668 -
Exercise of options - (213) 779 - 213 779
Deferred tax on share options - - - - (32) (32)
Write down on conversions of
ESOP shares - - 369 - (369) -
Purchase of preference shares 5 - - - (5) -
Cancellation of preference
shares (395) - 478 395 (478) -
Change in investment in ESOP
shares - - 74 - - 74
Share-based payment expense - 43 - - - 43
--------------------------------- ------------ ---------------- ----------- ----------- ------------- ----------
Total transactions with owners (390) (170) 32 395 (1,543) (1,676)
--------------------------------- ------------ ---------------- ----------- ----------- ------------- ----------
Balance at 30 September 2019
(unaudited) 5,040 89 (891) 398 92,946 97,582
================================= ============ ================ =========== =========== ============= ==========
JAMES LATHAM PLC
NOTES TO THE HALF YEARLY REPORT
1. The results presented in this report are unaudited and they have
been prepared in accordance with the recognition and measurement principles
of International Financial Reporting Standards ('IFRS') as adopted
by the EU and on the basis of the accounting policies expected to
be used in the financial statements for the year ending 31 March 2020.
The figures for the year ended 31 March 2019 are extracted from the
statutory accounts of the group for that period.
2. The directors propose an interim dividend of 5.5p per ordinary
share which will absorb GBP1,085,000 (2018: 5.0p absorbing GBP980,000),
payable on 24 January 2020 to shareholders on the Company's Register
at the close of business on 3 January 2020. The ex-dividend date is
2 January 2020.
3. This half yearly report does not constitute statutory financial
accounts within the meaning of section 434 of the Companies Act 2006.
The statutory accounts for the year ended 31 March 2019 were filed
with the Registrar of Companies. The audit report on those financial
statements was not qualified and did not contain a reference to any
matters to which the auditor drew attention by way of emphasis without
qualifying the report and did not contain a statement under section
498 (2) or (3) of the Companies Act 2006. The half yearly report has
not been audited by the Company's auditor.
4. Earnings per ordinary share is calculated by dividing the net profit
for the period attributable to ordinary shareholders by the weighted
average number of ordinary shares outstanding during the period.
Six months Six months Year to
to 30 Sept to 30 Sept 31 March
2019 unaudited 2018 unaudited 2019 audited
GBP000 GBP000 GBP000
Net profit attributable to ordinary shareholders 6,686 7,250 12,422
Number '000 Number '000 Number
'000
Weighted average share capital 19,759 19,661 19,674
Add: diluted effect of share capital options
issued 33 41 28
Weighted average share capital for diluted
earnings per ordinary share calculation 19,792 19,702 19,702
---------------- ---------------- --------------
5. Net cash flow from operating activities
Six months Six months Year to
to 30 Sept to 30 Sept 31 March
2019 unaudited 2018 unaudited 2019 audited
GBP000 GBP000 GBP000
Profit before tax 8,316 8,668 15,335
Adjustment for finance income and expenditure 152 109 185
Depreciation and amortisation 1,174 970 2,036
Profit on disposal of property, plant
and equipment (119) (1,062) (1,079)
Increase in inventories (151) (1,394) (2,282)
Increase in receivables (3,084) (1,574) (1,105)
Increase/(decrease) in payables 1,236 (2,935) (1,825)
Own shares non cash amounts 853 106 152
Retirement benefits non cash amounts (941) (967) (1,213)
Translation non cash amounts 12 - (31)
Share-based payments non cash amounts 43 51 94
IFRS16 Lease non cash items (23) - -
---------------- ---------------- --------------
Cash generated from operations 7,468 1,972 10,267
---------------- ---------------- --------------
6. The Group has adopted IFRS 16 "leases" which is effective for annual
periods beginning on or after 1 January 2019. The Company has chosen
to apply the modified retrospective transition method and so the prior
year figures have not been adjusted. The Company has elected to apply
the practical expedient for short-term leases to leases for which
the lease term ends within 12 months of the date of initial application,
and the practical expedient for low value leases.
The adoption of the standard has resulted in the Group bringing many
of its leases onto the balance sheet reflecting 'right-of-use' assets
which, are depreciated, and corresponding liabilities on which interest
accrues. The impact of the standard in the period to 30 September
2019, compared to the results if the standard had not been recognised,
is that operating profit has increased by GBP23,000 due to the elimination
of rent costs and recognition of depreciation. However, profit before
and after tax has reduced by GBP51,000 due to interest charges.
At 30 September 2019 non-current assets have increased by GBP4,344,000
as a result of the additional right-of-use assets. Total liabilities
have increased by GBP4,395,000 due to the addition of finance lease
liabilities. Total net asset effect is a decrease of GBP51,000.
The rent-free period accruals previously recognised under liabilities
to the value of GBP262,000 have been transferred to retained earnings.
A deferred tax provision of GBP45,000 has been recognised on the impact
of IFRS 16.
7. Copies of this statement will be posted on our website, www.lathams.co.uk.
A copy can be emailed or posted upon application to the Company Secretary,
James Latham plc, Unit 3 Swallow Park, Finway Road Hemel Hempstead,
Herts, HP2 7QU, or by email to plc@lathams.co.uk
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END
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